The new deal will extend the current one, which was scheduled to run out in 2014, through 2018.

Skydance has had a successful partnership with Paramount since it signed a co-financing deal with the studio in 2010. Since then, some of Paramount’s biggest hits have been from films it has co-financed with Skydance, including “True Grit” which grossed $250 million worldwide, “Mission: Impossible – Ghost Protocol,” which grossed more than $690 million worldwide and “Jack Reacher,” which made more than $200 million worldwide.

The company is not just helping on the financing end, but is also getting involved on the development side, similar to the way Legendary Entertainment was when it was at Warner Bros. (This past year, Warner Bros. and Sony had tried to woo Skydance over to their lots).

As part of the agreement, Skydance will continue to have the option to co-finance and co-produce certain Paramount properties. Paramount, in turn, will have first rights on all Skydance projects in development, with the opportunity to co-finance and distribute movies that the company produces.

“Our partnership with David and Skydance has been tremendously successful,” said Paramount Pictures Chairman and CEO Brad Grey. “We are very pleased to extend our relationship and look forward to many more successful years ahead.”

A big part of the extension happening now may have had to do with the three films Skydance co-financed in 2013, and their success rates. Skydance co-financed “G.I. Joe: Retaliation,” “Star Trek Into Darkness” and “World War Z” (pictured) with Paramount. All have performed well at the worldwide box office, with ‘G.I. Joe’ making more than $370 million, ‘Star Trek’ making more than $450 million and “World War Z” making more than $400 million.

The total production spending by Skydance is expected to range between $200 million and $250 million annually.

“Over the past three years Brad Grey, Rob Moore, and Adam Goodman have generously integrated Skydance into their amazing Paramount team,” said Ellison. “Extending our relationship with Paramount is the ideal creative fit to expand our business and produce elevated event entertainment for a worldwide audience.”

Paramount and Skydance’s next co-production, “Jack Ryan” will bow on Dec. 25. The two are also working on the next installment in the “Terminator” franchise, which Ellison is co-producing with his sister Megan and her Annapurna Pictures banner.